Capitulation is the terminal stage of a market collapse, characterized by investors giving up hope and taking losses, causing prices to bottom out. This typically stirs bullish sentiment as it creates opportunities for value investing and marks a technical sign that downside risk is being replaced by upside potential. Market bottoms are confirmable only in hindsight, which introduces an element of speculation.
Formula investing is an investment technique grounded in a predetermined timing or asset allocation model that eliminates emotional decisions from the investment process. By following a systematic, rule-based strategy, formula investing aims to mitigate the influence of market sentiment and human emotions in making investment decisions. The approach often involves specific triggers or conditions under which investments are adjusted, rebalanced, or reallocated.
A bear market where investors who sell incur substantial losses, while potential investors prefer to remain liquid until market conditions improve. Like a graveyard, those who are in cannot get out, and those who are out have no desire to get in.
Short interest represents the total number of shares of a stock that have been sold short but have not yet been repurchased or closed out. It provides insight into potential market sentiment and investor speculation.
A visual representation that plots the yields of bonds with varying maturities. It is an essential tool for understanding market sentiment and interest rate expectations.
